Professional services firms - partner leverage

The importance of Professional Service-based industries partner leverage

The importance of Professional Service-based industries partner leverage

Simon Roderick

November 1, 2023

In the realm of professional service-based industries, where knowledge, expertise, and client relationships are paramount, effective partner leverage strategies are vital for optimising client service, profitability, and overall success. Law firms, management consultants, accountants, and executive search firms are just some of the industries, which benefit from partner leverage. However, getting the balance right and a structure which enables you to deliver for clients at a competitive price, and sometimes across broad service lines, isn’t always easy. As we saw after 2008, when many law firms became partner heavy and struggled to hire associates as worked picked up, speedy changes to economic conditions can mean that leverage models can quickly become out of kilter.

Workload dictates many firms hiring decisions, but a distinction needs to be made between the type of work. Is the solution required highly technical and requires experience, or is the work more repetitive and straight forward? The former requiring more expertise and the latter more about output. Is the work very specific to an extent that people need to focus purely on this subject day in day out, or can someone with the right skills transfer from team to team? How can the work be delivered to a high standard and at a competitive price? Done correctly, leverage can allow partners to be very niche whilst offering a broader client coverage via a more junior talent and flexible pool.

Once the above basics have been clarified, effective partner leverage begins with solid communication. It's not just about allocating tasks, but fostering an environment where partners and junior professionals can interact across a business. In today's interconnected world, collaboration across teams and disciplines can be a game-changer. Encouraging cross-training among partners and junior staff can lead to a more versatile workforce, knowledge transfer, and retention. It can also help firms in the building of an internal talent pool, which can be allocated to where the business is experiencing the greatest need. Importantly, it can also help identify revenue opportunities and more holistic client solutions, and breakdown siloed working environments, where opportunities and best practice are often not be shared. Opportunities and themes identified by market facing individuals can be fed back to marketing teams, who in turn can prepare campaigns aimed specifically at client problems and appropriate solutions. Since the pandemic, we’ve seen a huge upturn in the creation of much more tailored content.

Ongoing training and mentorship are also key. In quieter markets, training and mentorship can be an important tool in talent retention and upskilling for any upturn. Colleagues who are invested in throughout economic cycles, and who are developed, are more likely to stay with a firm. These programmes can also be very important for Partners. It creates an environment for reverse mentorship where trends and different generational perspectives can be shared – an important component of spotting new revenue generating opportunities.

The adoption of automation and artificial intelligence (AI) is also reshaping many professional services. Management consultants, for instance, can automate data analysis and reporting, allowing partners to focus on strategic advice. In executive search, AI tools can help identify top talent quickly, enhancing partner efficiency or extending their reach to delve into broader and more diverse talent pools. Firms who adopt AI early are likely establish an advantage and allow firms to automate less complex work, which could improve margins or improve delivery times.

Great partner leverage strategies are essential for the success of professional service-based industries. By establishing strong foundations, embracing technology and innovation, prioritising training and mentorship, adapting to regulatory changes, and drawing inspiration from cross-industry insights, these sectors can improve their service offerings, client satisfaction, and overall profitability. In this ever-evolving landscape, the ability to learn and adapt, regardless of industry, is the key to staying ahead and excelling in the world of professional services.

About Fram Professionals

Fram Professionals focuses on placing office professionals in dynamic, innovative, or venture-backed firms in the London – Oxbridge “golden triangle”. We focus on mid-to-senior permanent hires across key functions such as finance, sales & marketing, legal, and management positions.

Contact us on [email protected] or call 01525 864 372 for an informal chat about our services.

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